The 300-page Federal Railroad Administration (FRA) Compliance Review Report found that the project is 鈥渋n default of the terms of its federal grant awards鈥�.

It issued nine key findings:

• CHSRA has 鈥渆xecuted numerous change orders and will likely have many more change orders in the near future to account for contractor expenses as a result of project delays鈥�.
• It has already missed its deadline for finalising its rolling stock procurement.
• There is 鈥渁t least a $7 billion funding gap鈥� to complete the early operating segment (EOS), a 171-mile-long section between Bakersfield and Merced, with 鈥渘o credible plan鈥� to secure additional funds.
• There is no 鈥渧iable path鈥� to complete the EOS by 2033.
• The project 鈥渞elies on volatile non-federal funding sources, which present significant project risk鈥�.
• CHSRA 鈥渓acks time and money鈥� to electrify the EOS by 2033.
• The report deemed CHSRA鈥檚 budget contingency 鈥渋nadequate to cover anticipated contractor delay claims鈥�.
• It also claimed CHSRA has 鈥渙verrepresented its ridership projections for the EOS substantially鈥�.
• Finally, the CHSRA 鈥渓acks the capacity鈥� to deliver the EOS by 2033.

The California High-Speed Rail Authority (CHSRA) now has up to 37 days to respond, after which the grants could be terminated.

In a letter to CHSRA鈥檚 CEO, Ian Choudri, the FRA noted the project delays and rising costs, as well as the fact that the project has received $6.9 billion dollars in federal support in 15 years.

Duffy said, 鈥淭his report exposes a cold, hard truth: CHSRA has no viable path to complete this project on time or on budget. CHSRA is on notice 鈥� If they can鈥檛 deliver on their end of the deal, if could soon be time for these funds to flow to other projects that can achieve President Trump鈥檚 vision of building great, big, beautiful things again.鈥�

The news follows an announcement in February by Duffy that USDOT would investigate the project and review two grants awarded to it: a $929 million Cooperative Agreement from 2010, and a $3.1 billion Cooperative Agreement from 2024.

Meanwhile, US President Donald Trump told reporters in May that the government was 鈥渘ot going to pay鈥� for the project.

In response to those comments, California Governor Gavin Newsom, a Democrat, said that it would be 鈥渞eckless鈥� to walk away from the project. With 50 structures already build and the track-laying phase about to start, terminating the project would waste billions of dollars already invested, he argued.